Boise State May Lose $40,000 From Nike Along With Football Coach

Coach Chris Petersen, who finished the season with Boise State University ranked in the top 20 six of the past seven years, left last week after eight years to take over the University of Washington’s football program in the Pac-12 Conference. Photographer: Christian Petersen/Getty Images

Dec. 11 (Bloomberg) -- Chris Petersen’s departure for the
University of Washington may cost Boise State University more
than its football coach. It also has a $40,000-a-year payment
from Nike Inc. on the line.

Boise State’s sponsorship contract with Nike says the
world’s largest sporting goods maker can reduce cash payments to
the school if Petersen is no longer with the team. Petersen, who
finished the season with his team ranked in the top 20 six of
the past seven years, left last week after eight years at Boise
State to take over Washington’s football program in the Pac-12
Conference.

The eight-year agreement with Nike gives Boise State $1.08
million in products and equipment this year and an additional
$40,000 in cash. Nike can reduce that at its own discretion if
it decides the brand value diminished with Petersen’s departure,
according to the contract.

“Coach Petersen was the face of our program and the face
of the university in a lot of respects because athletics is the
window to the school for so many,” Max Corbet, a spokesman for
Boise State’s athletics department, said in a telephone
interview. “We’ve had a great relationship with Nike and, even
though we’ve lost Coach Petersen, I expect that to continue.”

Boise State plays in the Mountain West Conference, which is
not one of the leagues that automatically gets a bid to one of
the most lucrative Bowl Championship Series postseason games.
Under Petersen, the team -- known for its bright blue artificial
turf home field -- qualified for two BCS games and won them
both.

Corbet said the school hadn’t heard from Nike about the
contract. Brian Strong, a spokesman for Nike, said in a
telephone interview that the company doesn’t comment on its
contracts with universities.

Brand Value

The next coach will determine the effect of Petersen’s
departure on the Broncos’ athletic brand, said David Carter,
executive director of the Sports Business Institute at the
University of Southern California.

“The brand is on the ascension and coaching candidates, as
well as the footwear and apparel manufacturers, realize it,”
Carter said in an e-mail. “Before Nike considers any financial
reductions they will certainly wait to see how they may be able
to leverage the program under its new leadership.”

Assistant Bob Gregory is in charge of the team until
Petersen’s replacement is hired, the school said last week.

Petersen was 92-12 in eight years with the Broncos, helping
the team develop into a top program. In addition to the BCS
games, Boise State won five conference titles under Petersen.

Hawaii Bowl

The Broncos are 8-4 this year and unranked in the current
Associated Press writers’ poll. The team didn’t qualify for last
weekend’s Mountain West title game and will play Oregon State
(6-6) in the Hawaii Bowl on Dec. 24.

The Nike contract, which covers all 18 athletic programs
and was extended in October, provides the school $1.08 million
in products next year, $1.15 million in 2015-16 and $1.23
million over the final three years. The cash compensation also
rises in the final four years of the deal, to $50,000.

The contract includes performance bonuses for the Boise
State football team and both men’s and women’s basketball teams.
There is no language that says Nike can change the terms if any
Broncos team’s on-field performance suffers.

“I feel like I needed to take a step out of Boise to grow
and improve,” Petersen, 49, said when he was introduced in
Washington. “It was very comfortable for me to be there, very
easy to be there.”

Petersen will replace Steve Sarkisian, who was hired at the
University of Southern California after five seasons with the
Huskies. A two-time winner of the Paul “Bear” Bryant Award as
college football’s national coach of the year, Petersen will
earn $3.2 million in base compensation next year, the school
said on its website. That would have made him the highest-paid
coach in the Pac-12 this year, according to USA Today.